Proposals seek to help struggling dairy farms

April 12, 2013

Fulton and Montgomery counties' population of cows dropped by nearly 4,500 over the past 10 years, according to the U.S. Department of Agriculture.

Meanwhile, from 2002 to 2007, the area lost about 40 dairy farms.

The struggles in the state's dairy- farming industry have prompted legislators and local dairy interests to call for change.

Article Photos

Tim Korona of the Korona Farm in Perth feeds cows before milking time in January.The Leader-Herald/Bill Trojan

People familiar with the dairy industry say many factors lead farmers to reduce their herds. Costs, profit margins, dairy pricing and lack of interest in farming among younger generations are some of the factors.

"The dairy farmers' children, like my kids, went on to better things," Fulton County Farm Bureau Board of Directors Vice President Lee Hollenbeck said. "Farming is a good life, but farmers are land-rich and money-poor, where the younger generation wants some money in their pocket to do something tonight."

State and federal lawmakers are reviewing proposals that may help farmers.

Fact Box

Falling numbers

Dairy farms across New York state lost nearly 65,000 cows from 2002 to 2012, according to USDA data provided by U.S. Sen. Kirsten Gillibrand, D-N.Y.

Local numbers:

In the Capital Region, there were 82,500 cows in 2002 and 65,300 cows in 2012, a loss of 17,200 cows.

Fulton County had 3,500 in 2002, and 1,900 in 2012, a loss of 1,600 cows.

Montgomery County had 16,000 in 2002, and 13,200 in 2012, a loss of 2,800 cows.

Gov. Andrew Cuomo earlier this year proposed changing regulations related to cow waste. Currently, farms with up to 200 cows are exempt from regulations requiring extra steps to prevent pollution from cow waste. Cuomo proposed raising the limit to 300 cows so farms in the state can expand without footing extra costs.

U.S. Sen. Kirsten Gillibrand, D-N.Y., is pushing for reforms as part of the Farm Bill in the Senate. Gillibrand says her plan would make dairy pricing more competitive for New York producers and improve reporting. The cornerstone of her plan is the Gillibrand-Collins Dairy Pricing Reform Act, which would reform the way the USDA sets dairy prices.

Demand for milk products is going up as New York's yogurt industry grows.

According to Associated Press reports, the number of yogurt plants in the state is now 29, up up from 14 in 2000. Because Greek yogurt is thicker and creamier than other yogurts, it requires more milk in its production.

The state is home to the nation's top two Greek yogurt companies: Fage in Johnstown and Chobani in central New York. Fage is undergoing an expansion that will double its output and introduced several new flavors recently.

Despite the increased demand from yogurt producers, the number of local dairy farms has dropped.

According to U.S. Agricultural Census for 2007, Fulton County had 28 dairy farms and Montgomery County had 158 dairy farms. This was a significant decline from 2002, when Fulton County had 44 dairy farms and Montgomery County had 181.

Hollenbeck said the average price a dairy farmer receives per 100 pounds of product often isn't enough to cover the expenses to keep a large herd. He said the increasing price of fuel has put an extra strain on the farmers because they have to pay more for the grain, fertilizer and transportation of milk from farms to distributors.

Hollenbeck also cited changes in the industry.

"Today, with there being more yogurt, and a lot of cheeses and people eating different for health reasons, it has changed the industry," Hollenbeck said.

He said when the milk is used for other products instead of traditional milk, the farmer often will not receive as much for the product.

"Say 20 percent goes to fluid milk and the rest goes toward butter, cheeses and other things, that is your lowest class and will only bring like $12 a hundred," Hollenbeck said. "I think it needs to be restructured to be priced to meet the demands and not necessarily the use of the dairy. If people are buying yogurt instead milk, the farmer should still be paid for the demand."

Gillibrand is proposing to have the USDA restructure the pricing system by studying different methods of determining prices, including competitive pay pricing or shifting from a four-class system to a two-class system.

The proposed legislation also would give farms with 200 cows or fewer a guaranteed $6.50 margin - the cost of milk minus the cost of feed - and would exempt the first 200 cows from supply management. It also would extend the current Milk Income Loss Contract program for nine months, pegged to inflation, while the USDA establishes a new program for dairy farmers.

Steve Ammerman, spokesman for the New York State Farm Bureau, said the state bureau supports the senator's proposed legislation.

"If there is a way to simplify the way pricing is determined and make that more transparent for the farmers, that will be a very good thing," Ammerman said. "That is something we definitely support."

David Balbian, dairy management specialist for Cornell Cooperative Extension, said although the demand for dairy is high from yogurt and cheese companies, the profit the farmers gain from those sources is not enough to always cover the price to maintain the herd.

"From the standpoint of how Greek yogurt has affected pricing, I think it has kind of been a wash probably," Balbian said. "It has created extra demand for dairy product, which is a good thing for the industry, and if we didn't have that demand, more milk would go toward class three or four products, which would be an even lower price."